Shares of WK Kellogg Co. (KLG) surged 50.29% in pre-market trading on Thursday, following reports that Italian confectionery giant Ferrero is nearing a deal to acquire the cereal maker for approximately $3 billion. The potential acquisition, first reported by the Wall Street Journal, could be finalized as early as this week, according to sources familiar with the matter.

The deal, if completed, would value WK Kellogg at roughly double its current market capitalization of about $1.5 billion. This significant premium reflects Ferrero's strategic move to expand its presence in the North American market and diversify beyond its well-known confectionery brands such as Ferrero Rocher and Nutella. For WK Kellogg, which has been struggling with declining sales and changing consumer preferences since its spinoff from Kellanova in 2023, the acquisition could provide a much-needed lifeline.

This potential merger comes amid a wave of consolidation in the packaged food industry. It follows closely on the heels of Kellanova's agreement to be acquired by Mars in a $30 billion deal last year. The move by Ferrero could significantly reshape the breakfast cereal landscape, combining WK Kellogg's iconic brands like Froot Loops and Frosted Flakes with Ferrero's global distribution network and innovation capabilities.